For a fourth day pandemic worries overshadowed vaccine optimism as the Dow took a dive straight down all day ending the session 219 down with the consensus remaining that “this is likely to continue until we have an approved and distributed vaccine.” Adding to the day’s anxiety is a tug of war triggered by Mnuchin between the Fed and the Treasury over relief lending, Mnuchin announcing that he will expire the Fed’s lending programs at the end of the year. These two institutions are supposed to work together rather than compete and could have “serious implications.” Another tough news item was the WHO advising that remdesivir should not be used as evidence of its effectiveness is lacking. Volume remains high and exactly in line with the 4-week at 10.7 billion. 

FRI  NOVEMBER 20, 2020  4:27 PM 

Wall Street closes lower as surging COVID-19 cases offset vaccine hopes

By Stephen Culp

DJ: 29,483.23  +44.81        NAS: 11,904.71  +103.11       S&P: 3,581.87  +14.08     11/19

DJ: 29,263.48  -219.75       NAS: 11,854.97  -49.74          S&P: 3,557.54  -24.33      11/20

NEW YORK (Reuters) - U.S. stocks closed lower on Friday as investors wrestled with fiscal stimulus developments, concerns over a lengthy rollout of vaccines, and a growing number of state-level shutdowns to combat the spiraling COVID-19 pandemic.  Stay-at-home plays such as Zoom Video Communications Inc ZM.O and Netflix Inc NFLX.O, which have outperformed throughout the health crisis, helped curb the Nasdaq's loss.  Throughout the week, the ebb and flow of vaccine news and spiking infections had investors oscillating between economically-sensitive cyclical stocks and pandemic-resistant market leaders.  The S&P 500 and the Dow posted marginal losses for the week, while the tech-laden Nasdaq settled a bit higher from last Friday’s close.

“Markets are still stuck in a push-and-pull between the dramatic rise of new COVID cases versus apparent progress on vaccines,” said David Carter, chief investment officer at Lenox Wealth Advisors in New York. “This is likely to continue until we have an approved and distributed vaccine.”

U.S. Treasury Secretary Steven Mnuchin announced late Thursday that he would allow key pandemic-relief lending programs at the Federal Reserve to expire at the end of the year, saying the $455 billion allocated last spring under the CARES act should be returned to Congress to be reallocated as grants for small companies.  The decision to pull the plug on lending programs deemed essential by the central bank comes at a time of spiraling new coronavirus infections and a fresh wave of layoffs, and was called “disappointing” by Chicago Federal Reserve president Charles Evans.  “This dust-up between the Fed and Treasury could have serious implications, as markets want to see the two institutions working well together,” Carter added. “The timing of this dust-up is unfortunate, as the risk of COVID is still very much with us.”

Record infection numbers have caused COVID hospitalizations to soar by 50% and have prompted a new round of school and businesses closures, curfews and social distancing restrictions, hobbling economic recovery from the deepest recession since the Great Depression.

In the latest development in the race to develop a vaccine, Pfizer Inc PFE.N has applied to the U.S. Food and Drug Administration for emergency use authorization of its COVID-19 vaccine, the first application of its kind in the battle against the disease. The drugmaker's shares rose 1.4%, and provided the biggest lift to the S&P 500.

The Dow Jones Industrial Average .DJI fell 219.75 points, or 0.75%, to 29,263.48, the S&P 500 .SPX lost 24.33 points, or 0.68%, to 3,557.54 and the Nasdaq Composite .IXIC dropped 49.74 points, or 0.42%, to 11,854.97.  Of the 11 major sectors in the S&P 500, only utilities .SPLRCU eked out a gain by closing bell. Tech .SPLRCT and industrials .SPLRCI suffered the largest percentage losses on the day.

Stay-at-home beneficiary Zoom provided the biggest lift to the Nasdaq.  Gilead Sciences Inc GILD.O shed 0.9% as a World Health Organization panel advised against use of the company's COVID-19 treatment remdesivir, citing lack of evidence the drug improves survival or reduces the need for ventilation.

Declining issues outnumbered advancing ones on the NYSE by a 1.06-to-1 ratio; on Nasdaq, a 1.12-to-1 ratio favored advancers.  The S&P 500 posted 17 new 52-week highs and no new lows; the Nasdaq Composite recorded 122 new highs and 10 new lows.

Volume on U.S. exchanges was 10.69 billion shares, compared with the 10.70 billion average over the last 20 trading days.